Update: see also discussion on Facebook.
Intellectual Property Is Theft
FEE.org
Thursday, June 30, 2016
Dan Sanchez
Property must be distinguished from monopoly. They are often conflated because they both involve exclusive rights. But they are importantly different. Property is an exclusive right to use a particular means. Monopoly is the exclusive right to use any means in a certain way.
Property is the exclusive right to use this boat, this paper, this trap, these speakers, this computer, this plastic, or this aluminum.
Monopoly is the exclusive right to use any boat to trade with India, to use any paper to make playing cards in 17th century England, to use any trap to catch beavers in North America, to use any speakers to play “Happy Birthday,” to use any computer to deliver a podcast or download “Happy Birthday,” to use any plastic and aluminum to build a certain kind of washing machine.
Since it is an exclusive right to use any means in a certain way, intellectual “property” is not property at all, but monopoly. Intellectual “property” is therefore a misnomer, euphemistically used by state-privileged monopolists to drape their monopolies in the mantle of property.
The Innovation Argument
But doesn’t IP stimulate innovation by rewarding it? One hint that something is fundamentally wrong with the “rewarding innovation” argument for IP is that it could be used by any other monopolist. The prospect of a royal monopoly in trade with India may be said to stimulate a merchant company to open up trade with that country. Why do some economists favor IP monopolies, yet oppose mercantilist monopolies? Why stop with artistic, literary, and engineering innovators and their intellectual innovations?
Indeed, why, in the modern era, do we not offer monopolies in business models and strategies to innovators? Why shouldn’t monopolies have been granted for just-in-time manufacturing or big box retailing? Sure, it would have impeded emulation, obstructed widespread adoption of these efficacious innovations, and kept them from benefiting consumers as much as possible. But, as monopolists might argue using the same line of reasoning as IP defenders, they might have been developed a little sooner if people thought that by developing such innovations, they could get a legal lock on them, and enjoy a long stream of monopoly profits.
Also, keep in mind that the “rewarding innovation” argument has been used by the biggest monopolist of them all, which itself begets all other monopolies: the State. It is often along this line of reasoning: “I was the first to clear this land of bandits and this sea of pirates. I am the first to fully provide defense with force to this land, and therefore I should henceforth have a monopoly of force.” Read, for example, Plutarch. Didn’t Theseus, by clearing the roads of highwaymen and monsters, demonstrate why he and his heirs deserve to rule Athens?
It is true that any prospective monopoly, including IP, might stimulate or accelerate the development of a certain innovation. But for every innovation a monopoly artificially boosts, it precludes, deters, and delays several more innovations: including (1) further innovations that the monopolist would have developed if he hadn’t been able to rest on his laurels, passively collecting his royalties or patent fees; (2) innovations that other creative people would have developed if they had been free to adopt and build off of the monopolized innovation; (3) any innovations that might have built off of innovations in categories (1) and (2); (4) any innovations that might have built off of innovations in categories (1), (2), and (3); and so on. Any institution that eliminates several good things for every one good thing it induces is a bad institution.
True Property Vs. Intellectual Monopoly
Property and monopoly (including IP) are not only distinct; they are antithetical to each other. To the extent that a proprietor has the exclusive right to use his particular means any way he chooses, a would-be monopolist cannot claim ownership of such “ways” and therefore cannot have the power to veto such uses. And to the extent a monopolist has “ownership” over ways of using any means whatsoever, a would-be proprietor can never truly own a particular means. The proprietor must ever be at odds with the monopolist.
The virtue of property is that it facilitates economization (the allocation of means to competing ends, when the quantity of the means is not sufficient to pursue all potential ends) by assigning in an ideal way exclusive control over those things which must be economized. As demonstrated earlier, monopoly (which includes IP) is antithetical to property. Therefore, monopoly necessarily hinders economization. This clear fault is not offset by monopoly’s alleged stimulus to innovation, because, as demonstrated above, monopoly (which includes IP) necessarily precludes, deters, and delays far more innovations than it boosts. Therefore, IP (and any other form of monopoly) is a wholly vicious institution and should be totally abolished.
Hobbling Entrepreneurs
How does IP’s hindrance of economization manifest in a market economy? The characteristic workings of a free market economy are determined by the institution that defines it: private property. Violations of that root institution will manifest in the characteristics of the hampered market economy that results.
According to sound economic theory, private property results in market exchange, which results in market prices, which result in market profits and losses, which guide and select entrepreneurs in such a way that production is ever-adjusted toward ever-better economization of resources in light of consumer preferences. An essential part of this process is as follows.
Anywhere this side of the Garden of Eden, there are imperfections in the way resources (means) are being economized in light of humanity’s ultimate (that is, “consumptive”) needs and desires. An innovating entrepreneur, using his superior judgment, changes the use of his own resources in a way that mitigates one of these imperfections. He jumps into a breach in consumer satisfaction, and begins to fill it.
Through his consumer-pleasing innovation (adopting a better way of using his means in production), this successful entrepreneur earn profits. These profits signal other entrepreneurs to emulate the innovator. In following the innovator into the breach, they bring along with them their own resources, which are then used to contribute to the filling of it. So much the better for humanity’s ultimate needs and desires.
The emulating entrepreneurs and their resources constitute competition both for each other and for the innovator. This competition impels the entrepreneurs to strive to outdo each other in more efficiently filling the breach, whittling down profits, and resulting in an even better economization of resources (manifested in lower real consumer prices), which frees up resources to be dedicated to filling other breaches instead.
Eventually the breach is filled as profits drop toward zero. The entrepreneurs then look to the next breach in consumer satisfaction, in their career-long quest to improve their own condition by way of making the world a better place (that is, by serving the ultimate needs and desires of humanity). “Profit earned, and problem solved. Onto the next profit/problem.”
Thus we see that emulative competition is, to use the language of computer programming, an essential feature of the market, and not a bug to be stomped on by the boot of IP or any other form of monopoly. The more freedom entrepreneurs have to emulate and the less artificial protection is given to first-mover profits, the faster will resources be wheeled in to fill the breach in consumer satisfaction, and the faster will competition induce gains in efficiency. Both results mean a better-satisfied consumer and a more prosperous populace.
Profits are supposed to be ephemeral. Profits are indeed a sign that a hole in human happiness is being filled, but they are also a sign that the hole is not yet filled to the top. The faster the sign disappears, the better.
IP and other forms of monopoly are a stick in the spokes of the would-be emulators who want nothing more than the chance to improve their lot by wheeling in their resources to participate in the filling of a breach in consumer satisfaction. It provides first-movers (or first-filers at the patent office) a sheltered, artificially prolonged stream of propped-up profits at the expense of everyone else, competitor and consumer alike. The breach in consumer satisfaction is then only leisurely filled by the sheltered monopolist at the pace of a government road construction worker, and other entrepreneurs are forced to go find an inferior, second-best way of serving consumers.
With respect to the market, granting an innovator in literature, art, or engineering “ownership” over his innovation (the way he used his resources: his paper, ink, computer, paint, plastic, aluminum, etc) is functionally no different from granting such a claim to any other innovator. It is a monopoly privilege, and as demonstrated above, monopoly privileges, even when held by innovators, only hamper the workings of the market and harm human welfare.
Now, does all this matter very much? Would society be tremendously more prosperous if IP were abolished? As established above, IP is economically harmful. It is an empirical fact that IP deeply pervades the market, covering every order of production, from home entertainment, to household appliances, to the software and hardware that underlie the digital sector, to medicine, to food, to heavy manufacturing, and even to the essential spread of sound ideologies through web sites and other media. An institution that is both harmful and deeply pervasive is deeply and pervasively harmful. Undoing a deep, pervasive economic harm is the same thing as providing a great, pervasive economic benefit. Therefore, yes, society would be tremendously more prosperous if IP were abolished.
Comments:
Though I agree with much of what is mentioned, the author fails to distinguish between the differences of various types of IP. For instance, trademarks and trade secrets are altogether neglected in this discussion.
Trademarks are vital means of a company to protect its reputation. For instance, if any company could sell Coca Cola in Coca Cola cans made from their own plants, how could an informed consumer know which Coca Cola they were actually purchasing?
On the issue of Copyrights, I agree they last far too long. However, how would we ever expect someone to spend hundreds of millions of dollars producing a movie, for example, if the first person that showed the film was free to copy and disburse? How could they possibly recoup their investment? How could an author expect to be paid for a novel if the first copy was scanned and uploaded for free legal viewing over the internet? Copyrights are worthy of a short protection, but 75 years plus life of the author is far too long. Although any number would be arbitrary, I think 5 years makes a fair deal of sense.
What about trade secrets? These are not protected by law as are patents. Should Coca Cola be forced to divulge its secret recipe? Should Dow Chemical be forced to publish its manufacturing processes? Trade secrets allow for a company to maintain a competitive advantage, not monopoly, until others are able to successfully replicate their secrets, and theft of these secrets should be rightly punished. Theft meaning breach of that company’s security, willful violation of contracts with that company, or violence against that company to secure the data, not 3rd party independent duplication.
While I agree that our current IP laws go much too far and patents are the most egregious, we do need Trademarks, Copyrights and Trade Secrets, but we need common-sense laws prevent their abuse as well.
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Literary copyrights aren’t too long. After all, a writer generally has only that property, or primarily that property, to bequeath, and it is income-producing property. So that’s fine.
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Trademarks aren’t a matter of intellectual property but of honesty. If I create a company called “Adobe” and start selling my own software under that name, even using an identical logo to the well-known Adobe, then I’m simply a liar.
Trade secrets should be protected by contracts. If an employee or contractor shares the secret against their Non-Disclosure Agreement, then the problem is breach of contract, not the mere fact that information is now more available.
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By that argument, property itself is a matter of honesty, which I’m fine with.
If I sold your house to a third party without your consent, that would be fraud to the “buyer” specifically because I don’t have the right to sell your house. Only you do. You have that “monopoly” right over your house. That’s how any form of “property” works.
The same applies to copyright and trademark, both of which are firms of legitimate property.
Furthermore, copyright is easily justified on right-to-contract grounds. Even the anarchist economist Rothbard agreed to that.
You have every right to sell a book with the contractual stipulation that buyers are not allowed to copy and distribute it. If they do, you may hold them liable.
If, like most people do, you believe that government is a justified and desirable institution in small doses, then it stands to reason that they would have a role in protecting those legitimate property rights, just like all others. But even if you don’t, the case in favor of copyright, trademark and trade secrets are clear.
Patent is a little harder to justify in purely libertarian grounds, though there are sound practical and economic arguments in favor of it, and it’s reasonable to argue that there may be some benefits to it that outweigh the costs. I’m on the fence about that one myself.
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“Property is the exclusive right to use this boat, this paper, this trap, these speakers, this computer, this plastic, or this aluminum.”
Correct. However intellectual property is no different–it’s the exclusive right to use this specific idea that one has created, this process discovered or developed at great pains and expense, etc.
This is no different than the ownership of a particular boat giving the owner a ” monopoly” over the uses and disposition of that particular boat.
It does not come at the expense of the rest of society, which is free to invent their own boat, or process, or drug, using their own ingenuity and resources. But it does spur innovation, in the same way and for the same reason that property rights encourage people to work and build things generally.
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Correct! With one minor clarification:
One cannot copyright an “idea”, only a unique act of creative expression of that idea.
The underlying “idea” itself is free for others to use and base their own unique works of creative expression on.
The commons of unique creative works is not depleted by you claiming copyright because specific creative acts of expression are both unique and infinite.
Admittedly, it’s harder to make that case for patent. But there may be a reasonable economic case for limited-time patents regardless–though that one is significantly harder to argue on libertarian grounds.
But suffice it to say, the case for copyright is VERY strong, even from a libertarian perspective. The same goes for trademark.
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I was in fact making the case for patents; the case for other creative works has already been made here by you and the other commenters. If you spend your time thinking up an idea, that idea belongs to you–you invented it, invested your time and genius into it.
But ideas are easily copied and spread, even more easily than books and movies! Why would someone–anyone–spend years to solve an inventive problem if other people could immediately take and use the fruits of that inventive genius?
So, to encourage people to invest time into ideas and then share them with society, we offer patents as a means to protect the individual’s investment for a time, when there are practical, valuable uses of those ideas. This protection encourages individuals to invent things and share them with society, benefiting society as a whole.
I’ve gotten patents. I also have ideas for inventions I believe would benefit society, but which I’ve kept to myself. Easier and safer to stay on the sidelines, rather than undergo the pains and expense of patenting, or endure the virtual certainty of copycats getting my years of work for free if the work is not patented. But is this best for America? Probably not.
I agree with the comments that patents ought not be issued so lightly, as granting monopolies over trivial, easily-arrived-at inventions can act to impede technical progress and innovation.
Not terribly long ago, the patent process was geared to spur independent innovation. If there were a bona fide invention, the patent examiner would assist an ordinary inventor in drafting the application! Fees were nominal, even waived. Today, getting a patent is tedious, complicated, and expensive, making it a tool for bigger players to deny entry to the small, a reversing of the original purpose.
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I am an intellectual property owner. I am an individual who put blood, sweat, tears and all the cash that I had in the development of my idea to turn it into a substantial thing and be awarded a utility patent to protect it. It is MY property and NO one else in the world has the right to use the idea I developed without my permission, which I might give under the right circumstances. What is wrong with this system? Nothing at all! If you are of the mindset that intellectual property is inherently the property of all mankind then you are absolutely wrong and I will fight you until my dying breath for the right to intellectual property rights. I challenge you to do this. come up with an original idea, by the way it’s much harder than it sounds. Develop it until it is actually something usable and desirable. Do a little market research to prove your concept to validate your design and ergonomics. Develop manufacturing techniques or find someone that can do it for you without taking your idea from you. Develop packaging and some sort of marketing stream. Borrow yourself into the poorhouse to produce your intellectual property so you can sell it. Now imagine this, Someone that you trusted, some lawyer, some eavesdropper, some fair-weather friend, SOMEONE has taken your idea and beat you to market! Oh, but you were right! The product was a big hit, but for someone else. You mortgaged your life for your dream and someone stole it. I ask you is this fair? Should there have been some sort of legal protection for you and your intellectual property? Shouldn’t you have a legal recourse if someone steals your intellectual property? Of course! It’s exactly the same as if you built a house, can anyone else just move in and live there, or rent it out? We have a system in this country for establishing and protecting intellectual property rights.If you EVER were to develop some of your own, you might understand why those laws are in place.
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But if a large corporation were to steal your ideas, they could bankrupt you in an IP court case. This is one flaw of the existent system.
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It would be easy to make them pay your court costs
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If the cost of defending your patent exceeds your net worth, you lose (you might consider insurance for this sort of thing). If a patent troll decided you had infringed one of their stash of hidden patents, they could sue you, again, for more than you are worth.
Serious patent abusers tend to select favourable states and judges for their benefit. The system is rigged for the big players.
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Good points Diogenes, but couldn’t IP insurance address many of those issues? Sounds like a potentially worthwhile market, waiting to be tapped…
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OK, there are so many problems here, I can’t even understand this argument! I happen to have 2 Master’s degrees and one is in Economics, so I don’t think I’m too dimwitted.
Anyway, Mr. Sanchez is saying our Founding Fathers were WRONG when they wrote the Constitution and shouldn’t have included IP in Article 1, Section 8? I am not a historian, but hasn’t the US been quite the innovator over the past 227 years relative to other countries? Empirical evidence, hegemony and our enormous GDP and GDP per capita would say yes. Now, I know that might be correlation, not causation, but perhaps, just perhaps, the Founders put protection of IP into the Constitution for a reason? Maybe that was one more thing Britain was doing wrong?
My point here is that Mr. Sanchez dismisses the innovation argument far to quickly, and the fact that the brightest people in the world thoughtfully included IP in our Constitution for a reason and they were all about free markets. Perhaps since information can travel so much faster now, the years it lasts should be reduced? That would seem appropriate. But when I think about the pharmaceutical companies putting in millions or hundreds of million in R & D so that they can get a return IF that that drug works, and some people want to get rid of this ‘monopoly’ protection – those drugs WILL NOT be produced. Incentives to produce are taken away. Even an inventive to get your own monopoly is far stronger than not having any guarantees at all or no incentive that you will get to keep what you create. With Mr. Sanchez’ idea, we will return to a Hobbesian existence, ‘nasty, brutish, and short’.
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Actually, IMHO, the Founding Fathers were indeed wrong in writing and adopting the Constitution. We would be far better off today if they had stuck with the Declaration of Independence and the Articles of Confederation. The Constitution was unquestionably a power grab and wrong for that reason alone. See Lysander Spooner’s http://www.freedom-school.c…
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Oh, then perhaps you would be interested in moving to a country that uses a confederation for their government? Oh, wait, there aren’t any! Why? Because as a governmental structure it really can’t work for any length of time. The Declaration of Independence was NOT a form of government and did not serve in that purpose whatsoever. The Founders did NOT adopt the Constitution, that was done by the state legislatures. So they wanted the Founders to do a power grab? I can’t believe you are hanging your hat on someone who is so bipolar as to wish for a confederation but to be opposed to slavery. Leaving the state’s with as many rights as possible, like they did under the Articles of Confederation, is what has lead to such different treatment under the local laws of different people. (like slavery, death penalties, cost of state university, quality of highways, value of welfare checks and so on)
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Not interested in moving. I’m staying here and will try to improve America, primarily by trying to reduce to the greatest possible extent the use of violence in the conduct of our human affairs–beginning with me. I am hoping that those who won’t reject the use of force will remove themselves from my homeland and make it a better, more peaceful, nonviolent place for all people of good will to live.
i am well aware of the two points you make with your shouted “NOTs.” I omitted making that clear on the assumption– obviously erroneous– that readers would recognize the ellipsis. Your reference to the Founders elicited my reference to the Founders. My bad, for not making myself clear on those two picayune points.
Susan, you say:” Leaving the state’s with as many rights as possible, like they did under the Articles of Confederation, is what has lead to such different treatment under the local laws of different people….” Leaving aside some semantic difficulties I see, and leaving aside the fact that I believe only individuals–not states–have “rights,” and omitting the fact that I think the rule of law is an abomination, what is wrong with such diversity? The Constitution you admire endorsed slavery across all of the states until it was eliminated by some. And that one error by its authors and adopters led to the Civil War and its violent aftermath of Reconstruction and Jim Crow, which altogether constituted by far the greatest disaster the people of America ever suffered.
Your bipolar comment implies that one cannot logically be opposed to a constitution that endorses slavery and be opposed to slavery. If that was your intent, it is a contortion of logic that makes bipolar sound rational by comparison. The Federal government under the Constitution was responsible for slavery in America AND for the Civil War. Indeed, Lincoln emancipated only slavery in the rebel states, and only as a military expedient. Diversity in state laws, absent the wet blanket of the federal constitution would have undoubtedly stimulated competition between the state to provide their citizens with better laws and government, and could conceivable have led to the abolition of slavery in all of the states at an early date.
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Oh, good grief. With all due respect, Mr. Sanchez, I’ve never read anything more fatuous at FEE. Or anywhere else. Maybe the fact that I’m a professional writer makes me more acutely aware of the need for the protection of intellectual property–which does fit your own definition of property, by the way–but even so this is really an astonishingly — well, bad piece.
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This piece is licensed under a Creative Commons license. Even Larry Lessig himself agrees that CC licensing is a form of intellectual property, albeit very permissive. So FEE uses the IP system for its content.
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The problem with saying FEE uses the IP system for its content is that it ignores that copyright is forced on us all, whether we want it or not, as soon as our words take physical form.
Thus, the need of a CC license to neutralize IP.
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Admittedly copyleft was introduced to prevent trolls from claiming ownership of your work and levying a fee for it’s usage.
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And so, the logic advanced by the developers of Creative Commons clearly limplies that they believe that copyright claims are actually morally justified.
They just have other sources of income (like sucking up taxpayer-subsidized education dollars with sky-high tuitions) so they’re happy to give away the property rights that don’t concern them (monetization) and keep the ones that do.
Lessing and folks like him don’t make a strong moral case against copyright in the least, as evidenced by their belief if exclusive authorship. Rather, they make a predictable emotional case against “business” and “commerce” and “profit” that is so common among today’s corrupt academics.
They’re not against copyright. They’re against property rights in general (other than their own) and against “profit” in general (again, other than their own.)
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While I agree that in the long run IP stifles innovation, I have a question about the short term benefits of IP protections.
If I as an innovator do not have the capital to take advantage of my innovation how am I to profit from it? If my idea is not protected until I can raise capital and establish production, how do I profit before someone else with greater capital takes advantage of my innovation for their own profit?
If every Tom, Dick and Mary innovating in their garage can simply have their ideas copied and produced by DuPont, Westinghouse and Google without compensation, what incentives do Tom, Dick and Mary have to innovate?
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That would be a good argument in the absence of non-disclosure agreements and venture capitalists. There can be legal protections in seeking investment to launch your product. If it’s a good product, someone will take notice and help you launch it.
Of course an idea is only a small part of the successful product. There is so much more that goes into developing that idea, manufacturing it, marketing it, distributing it, etc. It is entirely possible that you will only find investors that don’t believe you have the business sense to bring the product to fruition alone and they may insist on control, but you are still compensated based on what you bring to the table and still have incentive to innovate.
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A better analogy would be if I invest $5 Million in developing an Apartment Building only to have squatters come and live in it for free or worse, rent out my building to other people to enrich themselves, when they invested nothing in the property.
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You can always put a fence and a gate around that apartment building, and hire armed guards to keep people out.
How do you keep people from duplicating your idea? Particularly when it’s literally possible for someone thousands of miles away, thinking about the same problem that you might have, to come up with the exact same solution?
This is the reason why IP is evil: it assumes that ideas are unique and scarce, when they are just the opposite.
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Developing drugs is not free. Tell me how someone thousands of miles away will develop the same drug without billions in investment dollars?
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Easy. Drugs are natural compounds, and as such, are subject to independent discovery. The FDA may have some sort of registry to prevent simultaneous research, but what’s to stop another company in a different country from researching the same thing?
Part of the reason it costs billions of dollars to develop drugs, is that the FDA demands it. No one seems willing to investigate whether what the FDA does really makes us safer, or whether it merely shifts the deaths to the people waiting for a given drug, which generates less headlines than “FDA approves drug that kills people.”
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You wouldn’t have invested money into an apartment in the first place. The problem with IP is that it creates incentives where there should be none, and it takes away incentives where they would’ve been.
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Hey you can’t have a “monopoly” over that building maaaaaan.
/sarcasm
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Morally, a creation belongs to the creator because he made it. All other issues and concepts are important and many implementations of specific IP laws are imperfect, but no amount of appeals to scarcity, utilitarianism, or strawmen can refute that creations have creators.
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Yes, when someone comes up with an original thought, they created it, but It’s not theft if they tell me that thought, because the thought in their mind has not left their mind, but has manifested itself in my mind. Therefore I am the creator of the though which exists in my mind. I own my brain, And I own the materials necessary to make the contents of the thought into an object, both my brain and the materials I own, so I can do whatever I would like to with this object because other people do not own my object and they do not own the thoughts in my mind, I do.
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When I submit my written work to a company for potential production, what prevents them from just taking it and giving me no credit or payment? If there is no legal concept of intellectual property, then any novel, invention, screenplay could be stolen from the author without any recourse whatsoever.
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Most engineers have contracts that stipulate salary and benefits, and they generally take credit into account when trying to determine who should be promoted. Such contracts also stipulate that engineers can’t share their ideas, and any ideas they develop in their own free time are often considered company property.
Oddly enough, California has declared non-compete and non-disclosure agreements unenforceable. Sadly, as a result, California doesn’t have any tech industry whatsoever, and hasn’t had any for decades. Well, besides what’s going on in Silicon Valley, at least….
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Plain and simple the author is a thief
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Dan Sanchez, you are referring to the statist concept of IP, which should be a fairly easy target for any libertarian. Without the state, there would be no intellectual property as we know it. However, there would be means of protecting innovators’ ideas as developed by the free market, perhaps by contracts or other nonviolent means.. Innovator’s ideas are as much property as your home, and affording them protection through free-market means will prove a blessing not a hindrance to human prosperity.There is a wealth of good information on this subject over at Carl Watner’s http://voluntaryist.com/ website. Richard Boren’s article “For Intellectual Property, which does a good job of refuting Stephan Kinsella’s arguments in his monograph “Against Intellectual Property.” Carl also wrote a fine article on the history of IP. Here are some links, which should be required reading for those engaging in the debate.
http://voluntaryist.com/pro…
http://voluntaryist.com/pro…
ntaryist.com/property/watne…
http://voluntaryist.com/pro…
More links on the subject, including the views of Andrew Galambos, Lysander Spooner as well as to Kinsella’s monograph are here:http://voluntaryist.com/pro…
My own view on the matter is that abolishing IP makes extremely good sense if it is achieved by abolishing the state. If you abolish IP but keep the state you’ll have a lot more problems than those caused by statist IP. Your article addresses treating a symptom. Fogettaboutit and go after the cause.
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The author may be substantially right about patents in some technology areas, but I’d say that in other tech fields, not so much. There are many tens of thousands of patents related to magnetic disk drives. That’s because typically what is receiving patent protection is not an entire disk drive, but merely one very specific part of the drive. The first guy to come up with the idea of a magnetic head accessing areas on a rotating magnetic medium did not then sit back and collect profit from everyone for 17years, because within weeks/months there were many other patent applications filled and then granted on ways to improve some aspect of the disk drive, whether in its manufacture or operation or whatever. And hundreds more then improved upon those improvements, and then thousands more, etc. In order for those other companies to get into the market and stay alive in the market, they needed to find a novel and nonobvious way to make or use at least part of the drive–and for that to generate the necessary profits, this new aspect needed to be an ecomonic improvement as well. Thus, the patent system in fact created disincentive to just sit back and make drives that were merely “good enough” and served the public good by fostering technological progress at the same time that it protected the individual inventor.
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Like so many of his ilk, Mr. Sanchez makes exactly zero effort to distinguish between copyrights and patents. Patents turn a doodle on a napkin into a means of blocking others who independently arrive at the same idea. Copyright protects only a specific implementation of an idea, not the idea itself. Thus, I can write a spreadsheet program, and Mr. Sanchez, while copyright prohibits him from selling my program and pocketing the money, is perfectly free to write a competing spreadsheet program containing all the features mine has, and to pocket every dollar he makes selling it.
Anyone who fails to make this distinction is what I call an anti-IP hysteric. Random ranting is all they’re good for. I’d be worried if I thought there was any chance of their nonsense catching hold among more than a handful of true believers who, in their echo chambers, really think they’ve got some kind of great movement going.
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You’ve got it JDL. It’s a bewilderingly common error.
Copyright is extremely easy to justify in libertarian grounds, as it protects only unique works of creative expression, not “ideas”.
Patents are harder to justify on purely libertarian grounds, but so long as the operate in a similar way, claiming ownership over a specific assembly design rather than over an idea, there is room for argument there.
In any case, copyright and trademark are clearly both easily justified forms of property, and fully compatible with the just property claims of others.
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So am I to take this article as permission to republish all of your articles with my name on them?
I’ve heard this argument before but there are times when the theoretical principles don’t align with the mechanics of the real world. This happens in the art world where someone is caught passing off someone else’s artwork as their own. There is a natural socially imposed monopoly that grants rights to the creator while the “thief” is cast out of community and will probably never work in the industry again.
The same would be true if you plagiarized this article. We would never hear from you again.
The factor that works against your argument is that of Labor. An “idea” is free for all to mine but once your labor produces a tangible product it becomes your “property”.
John Locke said it better. “Whatsoever then he removes out of the State that Nature hath provided, and left it in, he hath mixed his Labour with, and joined to it something that is his own, and thereby makes it his Property. ”
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“IP” is a fake classification. One cannot treat all items so classified as the same. Such General discussion is pretty meaningless.
Government should be disassociated from IP, but then we must allow the market to handle each separate issue on its own merits. We cannot claim to know exactly how the free market would handle any particular issue, nor can we dictate to the market how it should do so.
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Never read such a huge stupidity. This Sanchez guy is total imbecile.
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I do understand the point that, in certain respects (not necessarily those cited by Sanchez), IP differs from other forms of property. And there are clearly arguments on both sides. But one thing does not really seem to be addressed and that is the practical implications. Has anyone yet answered the crucial question of why a pharmaceutical company would spend billions on research and testing if another could straightaway copy what they developed. And, if they wouldn’t are we seriously happy with the consequences?
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Property rights are human rights. This includes copyright, which is extremely easy to defend, even on radically libertarian grounds.
For instance, the anarchist Murray Rothbard easily defended copyright on the simple basis of right to contract.
And, if you’re not an anarchist, it becomes even easier to defend as a basic and essential part of property rights–ALL of which give the rightsholder a “monopoly” of use. That’s how “property” works.
Furthermore, copyright is easy to justify on both economic grounds and on the basis of compatible and equal rights.
First, it is worth noting that one cannot copyright an “idea”–only a unique act of creative expression of that idea.
The underlying “idea” itself is free for others to use and base their own unique works of creative expression on.
This means that claiming copyright does not deplete the “commons” of creative works as they are both unique and infinite. If anything, you’re infringing on others’ potential rights *less* with copyright than with physical property rights.
The case for patent is much harder to make from purely libertarian grounds, but there are reasonable economic and practical arguments in favor of it.
I’m on the fence about that one. But copyright and trademark are clear and compatible human rights.
To ignore them is theft, not to exercise them. To suggest otherwise seems both Marxist and illogical.
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Why would a pharmaceutical company spend $100 million developing a drug, only to see it copied and sold cheaper? it eliminates the incentive to even try.
Am I reading this article correctly?
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This is delusional… What drug company in their right might would invest $1 Billion in finding a successful drug (not to mention all the unsuccessful drugs that don’t make it to market) only to have some other company knock it off and sell it for pennies a pill?
Same goes with films and TV shows. Who would spend $200 Million producing the next Dark Knight, only to have some pirate sell copies of it on DVD in their story for a few bucks?
It’s ignorant of basic finance and investment.
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Patents are supposed to straddle the fine line between rent-seeking monopolistic behaviour and the encouraging the dissemination of innovative ideas to the public sphere. That is why a patent is a time-limited monopoly award.
The patent system, and in particular the US patent system has been systematically abused ever since Ely Whitney demonstrated the Cotton Gin to Thomas Jefferson on the White House lawn. Since the concepts introduced by David Teece in the 80s, US patents have lost sight of their original purpose.
The article above neglects to mention that the patent is awarded so that IP eventually benefits the public domain.
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Do you guys just write stuff to annoy people?
Abolish IP? Come on.
OK, abolish IP and tomorrow I am going to sell a product called Microsoft Office. I’m going to start a baseball team called the NY Yankees and sell tickets to games. I am going to start a band called the Beatles and sell a cd called Sgt. Pepper’s Lonely Hearts Club Band.
And, while you are at it why not abolish national borders? Oh yeah, I guess Obama already has done that.
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These tired old arguments have been thoroughly refuted HERE:
https://strangerousthoughts…
The horse is quite dead. I recommend you cease beating it.
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Is this type of nonsense Mr. Sanchez’s intellectual property. If so, WHY is he sharing it with us gratis?
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Nothing over on FB reaches the heart of the matter, which is the question whether or not ideas are property. Kinsella’s monograph “Against Intellectual Property” argues that ideas are not property and then draws many erroneous conclusions from that false premise. Richard Boren responded to Kinsella’s argument in an article published at http://voluntaryist.com/ entitled “For Intellectual Property, The Property Ideas of Andrew J. Galambros.” Boren’s title in my opinion is unfortunate, for it isn’t a defense of statist IP, but rather it is a refutation of Kinsellla’s false premise that ideas are not property and the erroneous conclusions he draws therefrom. Evidently Boren chose his title in order to contrast the lucid property ideas of Galambos against those of Kinsella as set forth in Kinsella’s monograph. By no means does Boren or Galambos defend the statist concept of IP. Intellectual Property as we know it according to the laws of the federal government would not, could not, exist in the absence of the violent, coercive state, an end embraced by Galambos and Boren. Suggesting that those who dispute Kinsella’s false premise that ideas are not property are thus in favor of statist IP is as dishonest as claiming that without the violent state all would be chaos and violence. Boren’s article and Galambos’ ideas are a healthy antidote for Kinsella’s brand of snake oil. Boren’s article is available at the voluntaryist.com website. Enter “IP” in the search engine, or just google the title and author.
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LAME. Start with stacked definitions, to support a strawman fallacy n irrational conclusion. Ownership means using your own property any way you choose. Oooops, I can’t use my IP in two different mediums. So I don’t own it because of a straw man? One can reasonably argue the length of copyrights, but only in the context that the owner has had sufficient use of the time. Not that ownership doesn’t exist. Obviously, that could lead to many different lengths based on what the IP is. Wish to argue the term “property?” Also fine.
Butt here’s where the monopoly hysteria falls apart.
euphemistically used by state-privileged monopolists to drape their monopolies in the mantle of property.
Sanchez owns copyrights to this column. Thus, he’s a state-privileged monopoly? If he was a more prominent author, in more prominent publication, I could steal his work, publish it first and own the profits of first use. I could pay a percentage of my ill-gotten gain to the publisher’s employee who stole it for me, to get the payment. (That example deals solely with his claim to be a state-privileged monopolist)
Ah, but he could decline first-publication rights. Um, that would be his decision, like me donating my car to charity. Then again, it’s far from original for some libertarians to deny IP. It’s been done, by some, for several years now. Orwellian.
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You skimmed over the distinction between property and monopoly and missed the entire point of IP: There are distinctive boats, pencils, chemicals, artwork that are unique by virtue of their special design and form as sculpted by their creators. If someone invents a special sailboat with unique characteristics and innovations, he has a strong claim to exclusive ownership and exploitation and transmission/production of that sailboat type. Perhaps there are distinctions where IP is not always exclusive; but clearly arguments can be made that IP legitimately covers reproduction, transmission and similar continuous ownership.
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You sound exactly like a socialist, or a would-be Marxist — everything is for the greater good. Sounds great to poverty stricken people who may also be lacking in experience., but never works out. Conversely, it always destroys individual incentive.
The purpose of a business is to get and keep customers, and make a profit for the owners. And that is all. The business that has been created and financed by its owners owes nobody anything. Yet there is a strangely reasoned idea that business are for creating jobs. So we hear people say their job was shipped overseas. It was not their job, it was a need in a business that was filled by an employee. It was the business’s job.
Somewhere along the line, the concept of individualism,and striving for one’s own achievement was lost to those who produce nothing and yet believe they are entitled to share with the producers. These kinds of people are rightly called “takers” and they are the bane of any society and economy. Politicians use these people to get elected and to stay elected in the corruption of government.
Your simple thesis is why communism and socialism and its cousin, fascism, have always failed. Always. The reason is because there is no incentive to invest huge amounts of time and money into an enterprise that is not actually “owned” by the investor, but has been created for the greater good of the people.
You seem to have no understanding of the human element as it interacts with the world. I suggest you read Ayn Rand.
I’m very surprised to find this sort of thinking in an article published by FEE. In fact, I question their objectives and their purpose.
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Yeah, I was thinking Wesley Mouch through that whole fatuous piece, myself.
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Very interesting argument. I tend to favor anti-IP arguments, however this article inspired a thought: perhaps a patent system is a way of diffusing the corruption of monopoly creation. Places around the world with less strict IP tend to also have more state monopolies, though this isn’t necessarily causal. Imagine a system without IP, but with a state… monopoly granting privileges would be even more consolidated, more… monopolous.
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Why In Deed?The writer very deliberately confuses invention with innovation. If one first assumes rights are a convention of agreement by most all folks, and most all do not have a state enforcing such opinions but act in favoritism or boycott in recognition of rights, then you can have an alternative to patent monopoly AND the authors institutionalizd copycat open season on inventors motivation to make money by thinking differently in un-obvious ways that no one else before them did. In answering the author and mostly agreeing with prior communication innovators or commenters, I have a libertarian alternative that was once practiced in thatched roof merchant adventurers halls and in a few rooms in the back called chambers of commerce. An adventurer was a venture capitalist who believed in the advent of a new age (and new world = America) where every man or woman was a king or queen. They evolved in response to state slavery and contractual indentured servitude, a specific charging method that eliminated both within 30 years among 100 development free charter companies in New England and New France. How?
They held court on who invented something, and then who innovated on that invention worthy of an incremental percentage of a free market recognized patent. 97% for inventor, 3% for innovator. Another innovator would be adjudged another 5% based on his argument both in the title company court and in the marketplace that caused the offense if objected to. The merchant-adventurer halls did the same with copywrites and trademarks. Answering: Who told a better story; or Whose blue cow versus purple cow tavern sign stole the reputation of another place at the other end of town.
When the merchants or venture capitalists as spectators or often jurors of peers noticed the same problem or argument coming up repeatedly, they went into the chambers of commerce (rooms) to discuss the chronic issue in concept instead of with the particular case being heard in open title court.
For instance, they had prejudices favoring the Anglican Church, and noticed problems with merchants having odd religious beliefs like Quakers or Separatists…so they came up with a system of Human Investments (HI) to get rid of them to the New Wirld since they didn’t like their innovations protesting Anglican Protestantism. They retained the indented two copies of a contract, but changed it from 100% labor obligation to another for 7 years by monetarizing it and having the potential exile be a Freeman that could own property in their own Freedominium (ability to own your own body as distinct from Dominion where somebody else owned your body). The expensive passage across the Atlantic, tools to farm or do a craft, and a grubstake for a year so they didn’t starve. The court disputes that had rich vs poor each pay a percentage-of-income to the judge who could then having already been paid by the aggrieved parties could be impartial, was carried over into lawyers at the bar, and emigrants. The greatest wave of voluntary immigration began for 125 years until the American Revolution ran out the contracts. However, by that time competition in Percentage As You Earn (%AYE) finance of immigration reached 7% of your income for 3 years rePAYEment.
This continued in various odd ways as the new US Constitution tried to emulate the free market procedures in patent law and even a Supreme Court was an afterthought because justice and incremental award decisions were common. The world today could use Title Company and %AYE FINANSURANCE to offer medical care for all in the free market, denationalize mortgages from installment payment illogic on long term contracts, and provide invention and innovation adjudication in capitalist courts. For more info [email protected]
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bullshit!
it’s the same kind of nonsense argument as the communist with their we-do-the-work-so-we-should-own-the-factory nonsense … it’s just an excuse to steal
it’s not because the government involvement leads often to monopolies that the concept of IP itself is wrong
the government is the problem, not IP
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I’m thinking the author has never poured every penny he can beg or borrow into the development of a new product and then watch a larger, well-heeled competitor start marketing a competing product before he has a chance to recoup his investment.
That said, process patents, particularly as they apply to software development, are somewhat out of control.
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